TBM Grassroots projecten TBM Onderwijsdag 2010 2 november 2010.
TBM Council Teleconference -- TBM Program...
Transcript of TBM Council Teleconference -- TBM Program...
©2013 Technology Business Management Council. All Rights Reserved
Principal Member Teleconference on Running an Effective TBM Program Office June 19, 2013
Executive Summary
In this TBM Teleconference, we discussed how to sustain an effective TBM program by building and
empowering the right team. We talked about the roles that are needed, from the TBM analyst up to the
TBM program director, how to empower them with the right skills and resources. We’ll also discussed
where the TBM program office should reside, how to get executive sponsorship, and how to create a
cadence through operational reviews and other processes. The recording of the teleconference can be
found online here.
Key Questions:
How would you describe the mandate of the TBM program office?
Who should be part of the program office? What roles and skills are needed?
With whom does the office work on a regular basis? How do you build and nurture effective
relationships?
How do you get the CIO, CFO and other executives on board with the TBM mandate (if they
aren’t already)?
What TBM-driven reviews do you perform on a regular basis? Who prepares for them? Who
participates?
Participants: Susan Blew (Visa), Cason Lee (Visa), Randall Pfeifer (US Bank), Martin Lieberman (Capital
Group Companies), Carl Stumpf (CME Group), Jon Sober (JPMorgan Chase), Monica Cirillo (UBS), Chuck
Niethold (First American), George Xiromamos (Safeway), Clark Robinson (Dell), Todd Tucker
(Apptio/TBM Council)
©2013 Technology Business Management Council. All Rights Reserved
©2013 Technology Business Management Council. All Rights Reserved
Contents Summary Findings ......................................................................................................................................... 1
Mandate of the TBM Office ...................................................................................................................... 1
Relationship with Other Functions ........................................................................................................... 1
Getting People on Board ........................................................................................................................... 2
Complete Teleconference Transcript ............................................................................................................ 2
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Summary Findings The following sections describe the main findings of the discussion grouped by topic.
Mandate of the TBM Office
The mandates of the TBM offices (or equivalents, by different names) varied to a large degree in
scope. In some (e.g., Visa, Capital Group Companies), the mandate was fairly broad, sometimes
including project portfolio management. In others (e.g., US Bank, CME Group), the mandate is
focused on cost transparency and financial accounting, analysis and management.
The roles often evolve from a strictly IT accounting role to a more strategic or advisory role. For
example, CME Group’s TBM office has evolved from controllership to a “high advisor” role
focused on empowering decisions by the firm’s technology owners.
For many, the organization starts out very small, with one or two people. At First American, for
example, the TBM office comprised two people and has grown to three FTEs. At US Bank, the
function spans just a few people as well. The programs tend to grow as it takes on new duties,
such as ownership of the service catalog, governance and business relationship management,
project portfolio management and so on.
The role for most is advisory, not decision making; a high advisor, if you will. According to Carl at
CME Group, “We need to provide choices, options and also an escalation point and kind of a
wall sometimes. But it’s absolutely that we have to enable the business. We shouldn’t be
making decisions for them.” However, due to the inexperience of product managers or lack of
financial skills, per Jon at JPMC, the TBM office often has to push product managers “very hard
and teach them an awful lot about making those decisions, to the point where you do “it for
them even if that’s not supposed to be your role.”
Having a tight-knit relationship between service management, business relationship
management and cost transparency appears to be effective. At Visa, for example, these
functions used to be separate but they’ve found synergies by combining them. They now
operate as one team, which makes it easier to hold service owners and business relationship
managers responsible for financial outcomes.
Relationship with Other Functions
The relationship with the PMO tends to be a close one. At Visa, Sue’s team works closely with
the PMO, drives the standards for how projects get approved and also defines the project
management methodology at the company. At Capital Group Companies, the PMO has been
split from the TBM office and focuses on the operational delivery effectiveness around projects.
However, Martin’s TBM office still maintains project portfolio management, which includes
measuring, reporting and driving decisions around the investments being made in projects and
the tradeoffs needed at the portfolio level. At First American, Chuck owns both TBM and project
portfolio management as well.
At several, the closeness with the service management function is apparent. For them, TBM and
service definition, strategy and improvement all go hand in hand. For example, Visa, Capital
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Group Companies and UBS all are working closely with their service management functions so
that TBM becomes a natural part of the way services are managed.
The relationship between the TBM office and key stakeholders, such as operations, should also
not be overlooked. At Visa, the operations team was the primary partner and sponsor of the
TBM office, having the most to gain from its creation and adoption.
Getting People on Board
It can take a lot of time to sell the TBM office, mandate and value to others in the organization.
At Visa, it has taken three years to get people on board. The key to success for Visa was to find
the right partner in the business, which turned out to be operations because they “had the
money” and “had a lot to benefit.”
There is always the danger that TBM is perceived as the “TV in the corner” (per Carl). It’s
imperative that TBM leaders articulate the value of the program. Carl goes so far to say you
must “explain how you’re either making [your business partners] more money or keeping them
out of jail or something.”
It’s also imperative that people understand how TBM applies to their job. This should be done,
in part, by changing the metrics or objectives to which people are held accountable. For
example, service or product owners must be accountable for the true cost of what they deliver
against metrics defined during annual planning or other targets set by the business. For
example, Jon Sober’s team set unit cost reduction as one goal for product owners and the
development of an agreed-upon strategy for to products or services. At UBS, Monica Cirillo is
working on a product management framework (approach) that includes, as a key part, holding
product managers accountable for their products’ success, including financial performance.
For some, the hallmark of success is enabling key decision makers how to make use of the
information. Monica said, “My goal is I want them to also become subject matter experts
around ITBM relative to their product portfolios. And once we get them to that level of
competency, we know that the central team would get leaner and leaner.”
Complete Teleconference Transcript Todd Tucker: Quickly before we get started on the topic, I wanted to give a brief update regarding the
conference that I hope everybody is aware of that is coming up in November. We are
working fast and furious to finalize the details for that. We obviously announced the
conference, which is scheduled for November 4th through the 6th? I’m looking at Megan
to make sure I get the date right. So November 4th through the 6th in Seattle. We
announced that at the Summit last week, and registration has already begun. We’ve
already had a number of folks register for the event; that’s great. And as some of you
have probably heard, but for those of you that haven’t, we’re also reaching out to our
principle members in a call for paper so to speak. I always find that term a bit awkward,
but a call for presents for day two.
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And if you are unfamiliar with the structure of the conference, the structure is a three-
day conference more or less where day one is designed primarily for the executives such
as CIOs, CTOs, CFOs of IT for example; folks that are really responsible for the overall
health and value of IT in the organization or in the technology organization. It’s designed
primarily for them, to let them interact with their peers on the topic of technology
business management to understand why companies are doing it, what they’re doing,
how it’s driving value. To understand at that level. Of course we ask the executives to
bring along one or two folks that would be responsible for actually driving the TBM
program. That’s the hope; that’s the way we positioned it.
So day one will feature mostly board members as presenters. So for example, we have
Rebecca . . . Rebecca Jacobi at Cisco as keynote speaker, and she’s actually working on . .
. and we’re hoping to have John Chambers co-present with her. We think that’d be a
very exciting way of kicking off the conference. So we have Rebecca as a keynote, but
other executives of course from the board presenting. And even though it’s on I think
day two that we’ll be at the museum, the flight museum . . .
Susan Blew: It’ll be on the 5th.
Todd: On the 5th, yeah, which is essentially day two right?
Susan: Well it’s essentially day one. We have the welcome reception.
Todd: Okay, so on the first full day we’ll have an event at the Museum of Flight which should
be exciting. And as part of that, and certainly with the theme of the Museum of Flight,
we’ll have Kim Hammonds who is the CIO at Boeing present as well. So it should be a
really good day one for the folks that are coming in.
Day two, we position it as it’s optional for the executives but it’s really designed for the
folks that would own and run the TBM program. That’s where we’ll feature hopefully
many of you, so principle members presenting more of the how behind TBM as opposed
to the what and the why. So day two will focus on that, and that’s the reason for having
all of you who live and breathe this there to present. So again, we’re reaching out and
hoping to have many of you able to make that. We’ve already got quite a few that have
tentatively confirmed, so I think that’s really good.
Day three is a day that we’re reserving for those that want to stay over and see some of
the tools from both Apptio and things from Apptio’s partners. We expect KPMG for
example who has been a partner and very strong advocate of TBM in the marketplace;
Ernst & Young; we expect probably others like Accenture and so forth. But those are still
being locked in, and again, the intent of day three is to give those that want to stay a
change to actually see implementations and so forth in action if you will. Actually see
what’s available to help companies with their TBM program.
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So that’s the intention. Again, we look forward to having most if not all of you there.
Being the inaugural conference, it should be a very exciting one. And let me ask this, are
there any questions regarding the conference?
Carl Stumpf: This is Carl Stumpf. So there’s going to be panels as well. I guess later we would talk
about kind of what we might discuss in the panels, etc.? That would obviously be closer
to the conference.
Todd: Yeah, we absolutely will Carl. Thanks for asking. We do have two or maybe three;
there’s one session that we’re deciding if it needs to be a panel or just a keynote on day
one. So we’re doing that, and then day two, we have the option of having panel-type
sessions or we’re looking for at least two presenters for each of the sessions that we
have. And we have a set of tracks that we’re also designing for that agenda. So tracks for
example around transparency, a track around planning, etc. And of course we’ll share
those details.
But we have the option of really doing either. I think if we have a lot of folks that are
interested and knowledgeable about a particular topic, a panel might be the right way
to do the session. So that’s a great question. But we’re so flexible until we obviously lock
in what those day two sessions are. Day one is pretty firm right now as we’ve had to get
things on everybody’s calendars. Day two is flexible intentionally so that we could line
up who the speakers are and then refine the topics and the method of presenting at
that point.
Carl: Yeah, I think day one is all the big wigs right?
Todd: Yeah, exactly. Exactly.
Carl: And then they all leave town and leave us to do the work.
Todd: That’s right. And that’s what you’d expect, right? Should be good though.
All right, if there are no other questions regarding the conference we’ll jump into our
topic. So today’s topic has been a very popular one lately. We had on the Apptio side a
webinar that was promoted to our customers on the topic of TBM program office I think
it was about three weeks ago. In fact, Chuck Niethold from First American presented on
that webinar as well and Kevin Teets who is one of our TBM advisors who came from
industry, worked at County of Orange before coming to Apptio, he presented as well. It
proved to be a topic that had a lot of interest.
So given that it’s a question that constantly comes up and I heard some interest from
some of you for this topic, I thought it’d be a good one. So I thought we’d talk about
how to build and sustain an effective TBM program office, and if you had a chance to
look at the discussion guide, we have four areas that we want to cover. The first one is
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just defining the office: what is the mandate, the mission? Where does the office sit?
Things like that. How is it structured? That’s topic one.
Topic two is how to drive adoption. So you can build something; it doesn’t mean they
will come. How do you drive adoption within the organization, both within IT and of
course with the lines of business and business consumers? It extends to that. Thirdly,
we’ll talk about establishing TBM roles and responsibilities. In other words, who should
make up the TBM program office? What are the competencies that you need to build?
How do you enable them, and so forth?
And finally, how do you drive a regular cadence for TBM? I think that’s probably closely
related to the driving adoption topic as well. But again, we see in TBM offices, a lot of
times they’re driving some regular reviews, meetings, etc. So I’d like to talk about that
as well. So I’m going to kick off, and Sue and Cason, I’m going to pick on the two of you.
Sue and Cason are both from Visa and have a function there that’s been established, so
I’ll start with you guys. And if you could, describe what is the mandate of your TBM or I
think you might call it an ITBM Office? What’s the mandate of that office? What’s your
mission? And give us a bit of an idea of how it’s structured and how it fits within the
organization.
Susan: Well, I’ll start since I have the overall responsibility for the IT Business Management
Office at Visa. I have a broader role than sort of the service management or cost
transparency role which Cason manages, and I’ll turn this over to him in a minute. But
our mission is to . . . we have a very well-defined mission. Our mission is to drive the
value of IT across Visa through improved alignment of our decision making, our
processes and our tools.
And so I have responsibilities for the relationship with Visa Europe which is a separate
company for IT for all of the IT work, which is a good portion of the relationship role at
Visa Europe. I have the project portfolio and we do all of the coordination with finance
around what projects are in the portfolio, how those projects get approved, working
with our PMO business partners or our Project Management Office business partners in
IT to gather their projects and to really work on formatting all of that and to get all of
the details loaded into the tools for approval by our executive management team each
year and then how we actually do the governance around that.
And then I have the Project Methodology Management or PMM group which defines
the various methodologies that are used at Visa, and how to run a project through that
methodology. And then the service management organization which Cason runs, and I’ll
let him tell you a bit more about that, which has executive reporting, the SLAs and OLAs
that we use, and then the costing organization. Cason, do you want to talk a little bit
more about that?
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Cason Lee: Sure, thanks Sue. The service management and cost transparency function within ITBM
basically has three key focus areas. On behalf of the IT executives, we do the board
reporting, the offering committee reporting and the executive reporting about IT
objectives, performance, issues and milestones. And we do that on a weekly and
monthly cadence. Aligned to that is we talk about our IT function from the perspective
of customer-facing services. So our customer-facing services are aligned by a service
catalog and I have a team whose focus is to align that catalog with the business, and to
understand and drive alignment with the finance organization about how costs are
rolled up into those services. And in addition to the cost of services and the definition of
services, we establish the service-level agreements and the operational-level
agreements that IT commits to either external companies or to internal Visa partners.
Todd: Interesting. So Cason, do you have the equivalent of business relationship managers
within your team? Or is that somewhere else?
Cason Lee: Yes, we have staff who are closely tied with each of the product organizations who
understand those specific steps of services.
Todd: Okay, and so in that case are they sort of a dual-function of they own or are responsible
for a service or a product and they’re responsible for the relationship with the
consumers of those products? Or are those two functions separate in your world?
Cason Lee: It’s combined in our world. And so they would have that external relationship as well as
the internal IT relationship to align IT systems, services, costs to the service that’s being
delivered. Most of our IT services are shared, so you have one data center; you have one
set of networks. But how you identify which components within a particular service
portfolio is the job of this team.
Todd: Okay, that makes sense. That makes sense. So I like the example here, Cason, just
because it is . . . I think it’s kind of an archetype if you will of a TBM office or a service
management office. The way you have it defined, it is somewhat different than we see
elsewhere but certainly an option. One of the challenges we often see with
organizations as they’re trying to adopt TBM is how they define what it is that they
deliver. And what some find is as they go through the exercise of modeling their services
for the purpose of costing and they do that analysis, they drive further refinement to
their services.
So in your case, where you have the service owners and relationship management
function tightly aligned with your organization that is also doing the costing, seems to
make actually a lot of sense like there would be a benefit there. Have you seen that as
you’ve gone through just the financial aspects of your role?
Cason: Absolutely. IT finances would be very difficult to dissect without that understanding of
the frontend business.
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Todd: Yep, exactly. Exactly, that’s really good.
Carl: This is Carl. That’s very impressive, the way you’ve got it setup. It sounds very robust.
How long did it take you to get to that state?
Cason: Luckily, the activity-based costing type methodology at Visa has been around for a good
ten years. What has taken place over the past couple of years under Sue and my
direction is pulling together a few of the functions into one offering unit. And so it used
to be that the costing function of the business relationship management was under one
set of managers, and the executive reporting and service level was under a different set.
By combining it, we were able to find some synergies and give them better mandate.
Carl: Given that you guys are pretty robust and have got the obvious stuff covered like
reporting and organization and stuff, if you guys saw the CEO and he asked you to
explain in 30 seconds how you make the business better, what would you highlight?
Cason: Well we would highlight that our objective is to drive internal efficiency and
effectiveness to drive external alignment with our customers. And also to improve the
operational excellence in time-to-market.
Susan: I think also we want to create this ability to an organization, predominately IT, which is
generally viewed by the business as quite complex and difficult to understand. And I will
say also we signed our deal with Apptio I guess almost three months ago now and we’ve
been doing this manually up until now. So we’re very excited about being able to
provide even more visibility and to be able to do pivots and to be able to answer
questions much more easily and efficiently.
Cason: We were similar. We existed a long time, then we were using it the same way. We had
very robust methods, but it’s much easier through a tool such as this to get your job
done.
Carl: Hey Sue, when you started talking, you gave the mission for your ITBM office.
Susan: Yes.
Carl: I have the first six words copied down, but you were going too fast. Could you repeat
that?
Susan: Drive the value of IT across visa through improved alignment of our decision making, our
processes and our tools.
Carl: Great, thanks.
Todd: Yeah, I was going to comment earlier. Carl, when you asked the question to Cason about
how do you articulate the value, I would assume, and Cason I’d like your perspective on
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this, is through the regular reviews that you do that you describe, you kind of answer
that question on a regular basis. Would you agree?
Cason: Yeah, we do that on both a regular basis and an ad hoc basis. My team and I do get
involved with projects that are in the works.
Todd: Yeah, I always think that if we’re doing TBM right, you shouldn’t have to answer as
many ad hoc questions about value. Obviously there are details and there are decisions
that you have to make that are ad hoc and there are optimizations you have to do, but if
you make the reporting a regular routine process, the reporting becomes a
demonstration or should reinforce the value that is being delivered. I think that’s the big
challenge that companies are facing right now, is how do you define metrics that
demonstrate value? In fact right now we’ve engaged with Forest on some work around
balanced score carding. They’re interviewing some folks that have reached out to a few
of you about this to understand and identify what are the best practices for that?
And I think ultimately what the needs to do is highlight value, maybe in a traditional
type of score or balanced scorecard or maybe not so traditional, but it should do that.
Then it should address things like risk and other things, but as a regular more routine
sort of process.
You know, I’m going to switch for a second just to give everybody a flavor of the types of
programs that are out there. And Randy, this time I’ll pick on you, Randall Pfeifer from
US Bank. Your program I would generally describe as a more focused program. Can you
give a perspective of what your program is, how it’s structured and what you’re
mandated to do?
Randall Pfeifer: Sure, and good morning everybody. And before I get to that, I just want to say that I
agree with Susan completely. I’d written down some notes in advance of some of these
questions of what I thought the ideal TBM office would be. Susan, you nailed it. You
cover within your organization all of the disciplines that I interact with today. And I think
and I’m hoping where you succeed where I think maybe US Bank is struggling is by
having one leadership, you can drive that alignment through all of those groups so that
you have a consistency in what you’re talking about and what you have for services and
all of the metrics and the things that work together, whereas within US Bank, in our
TBM office, it’s a very narrow niche. We’re using Apptio and it’s all about cost
transparency, and so we have 2+ years of the entire IT budget within the tool and our
intent is to be able to take that information, take it back to the business line and help
them understand what they’re spending on IT services.
But what I also have challenges with is I don’t get to define the services and the other
groups that are charged to do that are moving painfully slow. So we have to make
assumptions about what we think, what services will be and put placeholders in there
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waiting for other groups to mature and come along. What is also interesting as we
worry about cost transparency is we’re pulled into strategic planning and how to help
that group revamp the whole prioritization process and drive our metrics up through
that. We’re involved in the demand planning components of it. We’re getting pulled into
the finance and governance components as we evaluate whether we want to change
our legacy chargeback system to something that’s more intuitive than the way the
processes are today. So we touch a lot of realms, but our very narrow niche is just
ramping up this tool for cost transparency.
Todd: Hey, Randy, I’ve got a question. Since you’re kind of making assumptions about what
those services are or would be, can you describe how you do that? For example, do you
leverage your applications as kind of proxies for services? How do you define that
today?
Randall: Well, we do and we’ve made the decision very early on to take everything up through
applications. And ultimately, we have a very good repository of information that allows
us to take every application back to a business line owner, and through that linkage, we
have the entire model built all the way from the lowest level of cost centers up through
cost tools, IT resources, sub towers and things of that nature: datacenter mainframe
applications, disaster recovery and some of those categories. Mapping that all the way
up through applications, which then map on out to a business line. But nowhere in there
is the true spirit and definition of services and tied to that units of consumption and
things of that nature. We aspire to that, but we’re not there yet.
Based upon that, we do have a different approach and it’s less about services and it’s
more about can we rationalize applications? We understand who the users are of it; we
understand through business capabilities where we potentially have overlap in
applications. We start to put metrics around that. Can we actually shrink our application
footprint? That’s what we aspire to this year while we continue to work the parallel path
of defining services and consumption-based services and allowing business lines to
really trigger consumption and control their demand in the future.
Todd: That’s good. That’s a common theme. We’ve worked with Carol Zierhoffer at Xerox, and
one of her principle goals and something she ties a very clear metric to for an
organization is the reduction in their portfolio of applications because obviously if you
think about Xerox, there’s a huge legacy there, a long legacy. And so they’ve got a lot of
applications in their portfolio that really in many ways create a drag on their ability to
transform into the company that they need to be. So she knew coming in that she was
going to have to do that. So she put very clear metrics around the reduction and the
number of applications, and obviously is working towards that. We constantly hear from
folks that that is one of the big drivers behind what they’re doing with TBM is moving to
a rationalized portfolio of applications or services or a combination thereof. So that’s
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interesting to hear. Randy, do you have a . . . I guess a goal associated with
rationalization?
Randall: Formally not yet. The reason that needs to mature is from an Apptio standpoint and an
IT cost standpoint, we just loaded the office of the CIO into Apptio last month. And that
data goes all the way back to 2011. That office has not formally seen it yet, so we’re
going through the validation processes, the check offs and things of that nature. But we
do expect within the next 30 to 45 days that more excitement and interest will generate
around this data, because we truly do have the entire technology budget loaded and
cost allocated up through applications. So we expect that that will drive some ambitious
objectives in the near future.
Todd: Yeah, you shine a light on something and you can see or at least expose maybe what
needs to happen. That makes sense. You know, so again, in the goal or spirit of
highlighting some different programs, the third person that I spoke to before the call
that I asked to join is Martin Leiberman with Capital Group Companies. Martin, you
obviously have a different program still. You’re not an Apptio customer, so I thought it
was good to get a non-Apptio customer for sure to talk about what you’re doing as well
and how you’ve got it structured and maybe where you’re headed as well. Can you
comment on that?
Martin Leiberman: Sure. So I want to thank you for letting me participate as the black sheep in this, not
being an Apptio customer.
Todd: Not at all.
Martin: So we’ve come at this primarily from an operational effectiveness perspective, and so at
Capital Group we’ve been transforming IT over the last five years or so. In 2008, we
defined a new operating model. We collapsed our five IT organizations into one and
essentially established our shared services model. The TBO was created, our Technology
Business Office, was created at that time primarily to help IT and our senior business
leaders manage IT like a business and drive greater effectiveness and efficiency with
strategic planning, improved financials and operation support. Our early focus initially
was on just standards, and our metrics are very internally focused on compliance and
getting folks aligned on are we doing things consistently across the IT organization? So
it’s primarily about getting our house in order.
Last year, in 2012, we finished our three-year transformation program that was aimed
primarily at establishing a solid foundation for our delivery effectiveness. And so we
developed a balanced scorecard of metrics essentially around all of the different core IT
areas for delivering value, long-term focus and delivery effectiveness. And the
technology business office was really . . . our CIO was fully supportive of getting that
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established to really start to identify the value to our business partners. I’m curious
about the cost transparency issue.
Sometimes, and this has particularly been an issue with us, there’s a fairly high level of
satisfaction with the financial reporting at a very high level. And until we can actually
mature our services and capabilities with some of the more basic ethics, there isn’t a
whole lot of appetite to go and add complexity around the cost transparency because
that does add a lot of complexity in terms of being able to deliver some of that
information.
Todd: Yeah. So I think Carl, you at CME Group, you’ve kind of got . . . facing a similar situation,
right? Where you’re focused right now, or at least have been, on more of a financial
view of your costs. I mean can you comment on that, just related to what Martin just
said? Maybe how you guys are looking at that in your evolution?
Carl: Yeah. First of all, I thank everybody for being on the call. I’ve learned a lot about
everybody’s gotten to this place in a different way. We started here ten years ago
because basically the CFO told me we’re going to go to jail if we don’t fix some things. I
remember that quite clearly; he poked his finger in my chest and yelled at me.
So we had horrible accounting and financial problems that we fixed right away that took
years to fix. Capitalized software interest, we had telecom billing, we had accrues, we
had prepaids, we had asset write-offs. So we started kind of different in that we started
with all these types of things, then my group has control over . . . we’re much smaller in
a lot of ways than you guys, and it’s unimaginable that you would control your time
entry system in some of these larger companies. But we control time entry; we control
most of the journal entries; we control a lot of the GL subsystems. We post the entries.
We do a lot of mechanical things, and then accounting doesn’t do them. So in some
ways that’s a huge blessing in the stuff that you guys clean up or can’t clean up or see in
the GL, we own.
Where we are now though is we’re trying to get back to the value question. So they
know we can do all these things, right? The real value question is how we can make the
business better. So now we’re starting to get into beyond just financial transparency,
we’re integrating with the metrics, the outage metrics and the incident metrics and the
customer satisfaction which is not that high, customer being internal. A lot of them go
to cloud applications when they can. They have grievances. So we’re trying to move
from just talking about cost and transparency by service to incidents and satisfaction
and should we be here in the cloud? Now we’re trying to drive efficiency discussions
with external customers and how they impact our business. Does it make more sense
for us to build capacity or to change their behavior? What’s profitable?
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We’ve also done a lot of merges and integration and partner exchanges. So the
inorganic stuff is a huge chunk of my time, and trying to determine does it make sense
for IT to provide those services? And often, those services also provide us an
opportunity to rewrite our systems, like a positive change opportunity. So we like to
drive those things rather than burdening them with their cost. For example, if they want
a feature that we don’t have, then you view it as just a cost of that venture. You’re
missing out the opportunity to rewrite your own stuff and get better.
So I don’t know, is this helpful? There’s so much stuff we do. I’ve been up to my neck in
it for a long time so it’s nice for me to see these groups that have formed that have a
plan. One of my problems is the function is usually me personally. So I’m trying to
rebrand it with the Apptio tool and also with more of a conceptual framework.
Todd: Yeah, I think one of the major questions here is just what are the roles that we see as
being part of TBM Office? To your point Carl, if it’s viewed as just you, that’s probably
not where you want to be. But what is the right structure? And Martin, you’ve got I
guess a fairly mature organization really. I’m curious how is your group structure?
Martin: It’s actually pretty . . . it sounds quite similar in terms of the capabilities to what Susan
mentioned in Visa. We also have a sourcing office inside the TBO, so basically that was a
fairly recent add to our organization in the last couple of years and really establishing a
model for how we engage with third parties. It’s not the end procurement but certainly
our relationship with our key IT partners happens through that organization.
We also focus on internal communications and associate engagement. So a big part of
what we do is basically managing the IT engagement process and making sure that
we’re giving associates the right kind of development; that we’re focused on building
leadership and skills internally. One of the issues we’ll focus on in the next three to five
years is really changing the skill base in our organization and try to do that as much
internally and provide people with internal opportunities. So a lot of reporting around
that; what’s our internal mobility around staff? Are we creating more fungible resources
that we can use across different parts of the organization?
So that’s in addition to kind of the annual budgeting process which we share with
finance and accounting. And yeah, balance score card reporting and supporting the
governance groups that we have in really giving them the visibility to our portfolio
projects and decision-making on prioritization and budgeting.
Justin Shriber: Martin, I’ve got a question for you. This is Justin Shriber. A lot of times we see that the
formation of a TBM office is formed in conjunction with deployment of a new
technology that drives that. In your case, you’re obviously not an Apptio customer. I’m
interested I understanding where the mandate came from and how you guys got the
charter to do what you’re doing.
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Martin: Yeah, so it was primarily when we changed our operating model. So going from five IT
organizations into one central organization, it was really the mandate was in order to do
that we need to operate this like a business so that the delivery folks can focus on
delivery for the business. And really we wanted to provide the services and capabilities
to those delivery organizations so they didn’t have to worry too much about spending
their time on what’s the budgeting cycle and how do we engage? We certainly engage
with them, but the process and the methodology pieces we kind of took off their plate.
Some of the things with our project management methodology, our PMO has recently
been pulled out and is now a separate organization. They’re focused on operational
delivery effectiveness for projects, but we still own the portfolio, the portfolio process.
So it’s really the mechanics of running the business of IT is really our mandate. And
reporting the executive group and their interactions with their peers in the organization
with this is the story of what IT delivers and how we deliver it, and having a function to
be able to support that, was really critical for us and having a function to be able to
support that was really critical for our CIO.
And so it was really about what are the operational and sort of business-impacting
metrics that our CIO could use in having business conversations? And so we were
focused really on delivering to that objective at the same time as going through
supporting this transformation over at the organization.
Justin: I bet many of the organizations really didn’t start though with a tool. I think that may
have been when they formalized their mandate. I’m sure . . . it’s interesting to say the
words like mandate and charter because those come about later. A lot of these people
were already doing this work I’m sure and adding value, and over time it just got more
and more formalized. I bet most of these aren’t built from scratch. This process has
given legitimacy and they’re getting better tools, but probably most people were doing
this function because they added business value all along.
Martin: Yeah, and I think that’s certainly true. We had bits and pieces of this going on in
different places. The question at all is the maturity one, right? So I think where we’re at
in our journey is we’re getting our processes more mature. They’ve certainly been . . .
take our time entry as an example, we own that in the business management office and
we’re in our third or fourth iteration of re-implementing that capability so we can
essentially support the kinds of reporting that we need. I think we’re not sophisticated
enough yet from a cost standpoint to go down the path of this cost transparency
question.
Carl: Someday I’m sure it’d be not an exciting topic for many, but we can almost have like a
time-tracking call someday, a side call, because I’m sure we’re all . . . I don’t know how
many times I’ve rewritten mine. Now we’re writing our own from scratch.
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Jusitn: You raise an interesting point though that there’s this organic movement that starts
small and it grows and at some point it’s formalized and it’s hard to put your finger on it.
I’m interested though in hearing from you and other folks as well, how do you expand
the tents and bring more people under the tent? I’ve talked to a lot of customers where
there’s this core set of believers that are on board, and there’s a question about how do
we bring more people into this with us? How do you see that happening?
Carl: Well I don’t want to do all the talking so somebody else take a stab at it.
Susan: I would say, this is Sue, it took us almost three years to get everybody on board. I met
with Apptio probably within two months after I joined Visa which was a little over three
years ago and really felt there was huge opportunity for us. The first year that we put in
for it, we did not get approved. And then we really worked to find a business partner
that we thought could benefit from the tool, which turns out to be operations in our
case. If you think about Visa, that’s a lot of who we are is how we operate our network.
We have a very, very high availability obviously. We just can’t have any downtime. We
still need to make change, and that environment, we want to make sure we’re using our
precious dollars effectively and efficiently.
So at the end of the day, we ended up partnering with operations because A) they had
the money and B) they had a lot to benefit from the tool. And I would just say our
account executive with Apptio had been our account exec for another company, one we
use a lot here at Visa, and she was instrumental in helping get the visibility and bringing
in Sonny Gupta to meet with our senior executive team and really helping to drive the
understanding of how this could really transform; how we bring together our utilization
and cost in a much more seamless way and get a line around this and not have so much
manual overhead.
It’s just been very, very difficult as you might guess to do this work manually and to
figure out how the data . . . the financial data fits in to the overall picture. We do full-
cost allocation, although we don’t do chargeback, but we do full-cost allocation. So you
really want to make sure your product or service understands what their costs are and
what’s driving their costs.
So I think it’s complex. I mean I don’t think this stuff is easy, but I’d say leverage your
partnerships and figure out where you can find the most value for the tool and get those
people on board as quickly as you can. I certainly invited people from the business to
attend the TBM Summit because I thought there were so many people who spoke so
powerfully about how moving forward with this helped them. It just gave me a lot of
confidence and it helped my business partners to understand as well what we were
proposing.
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Carl: It’s interesting. I asked earlier how you’d describe your stuff in 30 seconds to your CEO. I
think you hit on a lot of the things that I’d have probably stolen instead which is we
can’t fall down; these are critical metrics; we’re going to make your money stretch
further. I think there’s a point where TBM just exists and you do reports and you’re
there and you’re kind of like the TV that’s on in the corner. But in the end, we have to
take a bigger stage and we have to show how we’re going to either help uptime or we’re
going to make our money stretch further. I think the process has to be there and that
just gets us to the table, but to be at the table then you’ve got to explain how you’re
either making them more money or keeping them out of jail or something. I hate to be
so blunt.
Jon Sober: This is Jon. We had a very interesting situation where we had a number of people who
had, as Sue said, bought into this. And you’ve got some ideas of all the people who buy
in, and we had a number of people at the grassroots level who had bought into the TBM
and the activity-based casting. We had a number of people at the senior level, and we
discovered quite interestingly that there was a bit of a gap between them. I felt that we
had to close that gap, having identified it. But people who believed they knew what
their job was and it didn’t include technology business management despite the fact
that they were managing technology and managing the finances of technology, needed
to be given an incentive to work on the right thing. And that was about helping to get
the right objectives set for them.
Todd: Yeah, to some degree it boils down to accountability right Jon? I guess a question that
relates to the adoption theme is how do you get the people that are responsible for
driving costs of your technology and your services, how do you get them to be
accountable for those costs? I’d be interested . . . there’s formal mechanisms obviously
when you’ve got like chargeback, so people are being held accountable that way, but
that’s usually from a consumption point-of-view. How about from a product manager or
service owner point-of-view, how do you get them accountable? Cason, you had one
approach which is they’re integral to your program. But I’m curious how have others
approached this? Jon, give us your perspective on that.
Jon: We made a specific effort, I made a specific effort, to try and have a couple of objectives
that when you talk to people or when their managers talk to people at the start of the
year, they had ready-mades to kick to people and say here is a TBM-related objective or
two of them. And the two that we actually used because they drove the majority of the
behaviors that we wanted managers to take on were reduce your unit cost of your
service or product, and you could set it the same since you’re going back . . . that causes
a whole load of good work to be done if you tell people they can hit both the numerator
and denominator in unit costs. You’ve got all the right things happening.
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And the other was to have a strategy for their service and the development in their
service that their customers had agreed, and they were delivering to our governance
timelines. So delivering to an annual governance timeline of changing the services, but
tied into the financial planning. Put those two objectives in front of the relevant people
throughout the management line, you get the right movement.
Todd: I’ll pull somebody else into this. Monica, I assume you’re still on the call with UBS. You
seem to be going through something of a transformation or a change in the way your
program is run. Can you give us a perspective of that, and given that you’re also from
financial services, large banking, and you probably have product managers or service
owners, can you also comment on how you’re maybe working to improve accountability
for the financial outcomes?
Monica Cirillo: Absolutely. Thank you for inviting me. I’ve been listening intently. So from the UBS
perspective, I’m in what we’re calling the Platform Services Technology Organization.
And to give context, it’s your traditional infrastructure technology with some pieces
going further up the stack, and the aspiration for the organization is to get into the
business of providing true end-to-end IT services to our clients whether they be the
actual front office business clients, front office operations clients, or certainly a standard
compute staff to our application clients.
So definitely a move forward for UBS. I think similar, in terms of our current footprint,
we’ve only had a central technology organization for about five years. Prior to that, it
was completely separate, siloed, isolated kingdoms if you will. Our lines of businesses
had their own tech strategy and stack and the like, so our footprint is still representative
of that variability. So we have some challenges ahead in terms of really right-sizing that
foundational technology, our infrastructure footprint, and at the same time coming
forward with services that are relevant in the marketplace and that we can offer
competitively.
So what I really described just there, if you figured it out, is we want to be like the
Ciscos. We want to be like the Dells and the like, an IT service provider, and to be able to
do that in a commercially competitive and viable way. To that end, we are committing
to implementing a very standard product life cycle framework, and aligning it . . .
challenging ourselves to align it to best practices for product life cycle management. Not
even specific to technology and certainly not specific to financial services technology. So
we really want to challenge ourselves to say how can we be doing this and thinking
about it very differently?
Now the interesting piece of this is I think we have a great opportunity to improve our
methodologies around service costing. We absolutely have an opportunity to think
about employing pricing strategies to influence some client behaviors, and so we have
to get that core process right. And our view is we’ll do that with a small, central team of
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subject matter experts that really understand the way that technology financials behave
in the PNL as well as on the client bill. But by the same token, we want to insure that the
product managers really have end-to-end accountability for their product success, and
they have to include the financial performance.
So for us, it’s got to be a very delicate balance of teaching them to fish. That would be
my goal is I want them to also become subject matter experts around ITBM relative to
their product portfolios. And once we get them to that level of competency, we know
that the central team would get leaner and leaner. I kid around with the folks. I say
when you give your teenager . . . they get their driver’s license and you’re handing them
the keys that very first time, in theory they know how to operate that machine. But
sometimes bad weather, rocky roads, you never know actually if they’re going to veer
off the road. So we definitely want to have that central TBM-type program office to help
them from the product side, and then teach them to fish.
So that would be the first thing that I would ask for peoples’ commentary on that. If this
sounds like a silly idea, stop me now. Help me to back off the cliff and give me your sage
advice on how to do it, how not to do it and the like.
Todd: Well hey, Monica, I’ll comment just on that because although Dan Cavey couldn’t join
us, and I don’t know if you know Dan from Bank of America.
Monica: Absolutely.
Todd: That’s what I figured; I thought you two did. But he was at our workshop in Chicago a
couple months ago and he shared that they’re working on a similar product
management kind of model framework if you will, with the intention of building the skill
sets and the processes and so forth for that group which is obviously a very large group
as it is probably for you. So he’s looking at the product management discipline.
And what I find so interesting about that, coming from software . . . you know, I’ve been
in software for 15 years now. And product managers, that’s obviously a very formal and
very central role, a very pivotal role for any software company. And what’s key to the
success of I think any product development organization is to have a very clear process,
to train people on that process, to have stage gates associated with it where you’re
measuring outcomes. And a lot of that happens to be around the build and delivery of
that. But there’s also then the ongoing metrics for commercial success of any product, a
product PNL and things like that. And so the product manager has to be astute to
manage both aspects, the delivery or the support or the ongoing success of the service
or the product that they own.
So I certainly don’t think it’s a crazy idea. I think in your space, I’ve also talked to some
other folks, the Goldman Sachs team, Peter and Suzette and Jeff Souza there, they’re
working on this as well more from an IT finance perspective. I’ll ask this. One of the
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questions I had in the guide is what’s the role of the office in terms of advice versus
decision-making? Are any of you tasked with or authorized to make decisions or is it
mostly an advisory role?
Carl: I’d say that I certainly am a high advisor in terms of in the end a business has to run their
business. We need to provide choices, options and also an escalation point and kind of a
wall sometimes. But it’s absolutely that we have to enable the business. We shouldn’t
be making decisions for them. That’s at least my opinion.
Randall: I think that’s true for me as well. High advisor would be a good way of calling it.
Jon: I think actually sometimes, going back to the last comment about how do you train your
product managers, my experience with inexperienced product managers or service
owners is sometimes you have to push them very hard and teach them an awful lot
about making those decisions, and you effectively do end up doing it for them even if
that’s not supposed to be your role.
Todd: Yes, we all know that . . .
Monica: Well no, I think that’s the balance that . . . I’m calling it a delicate balance, because I
don’t want them to . . . you know what? I can probably pick the ones out of the line-up
who understand the power of the engine when you hand them the keys to the car. And
even at them, we’ve not given them that type of visibility yet. So I think it will be a lot of
hand holding. However, what I think we find today is there is a central organization that
has almost taken the reins completely, and it’s very convenient then for product
managers to say you know what? I’m not empowered; I don’t know what they’re doing
over there. I’m not in control of the cost or the price of my service. So I definitely need
to change that dynamic. I view it as empowering them, but yeah, I think that maybe
there’ll be some very strong advice that I give them at one point.
You have to have . . . I think the other part is that lean piece that will stay is the control
piece that says in aggregate, right, are we where we need to be from an organization
perspective? So what I’d like to change is when things don’t look like they’re being done
well, instead of us fixing it ourselves, we have to pull those product managers in and
keep them engaged. Keep them uncomfortable in the conference room with us until we
get it sorted, and they kind of learn what’s involved, right? The inner workings. So I
don’t know how long that will take, quite frankly. There’s a lot of . . . as you alluded,
there’s a lot to product life cycle management that we’re going to have to focus on in
terms of competency and the new operating model where they’re really empowered.
But that’s where I would like to go. There will always be a very lean what I’m calling
financial control function on top to make sure that in aggregate across our service
offering, our costing methodology and our pricing strategies are operating as planned. I
guess I would say it that way.
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I do have a question, if I may. So when you have . . . I was just having this conversation
with our CIO yesterday. When you have a product office or a TBM program office, how
we represent our activities, and I don’t want to say necessarily if it’s change the bank or
run the bank or whatever pocket you’re funding it from, right? But you have this
portfolio of activities. The way that I’m thinking we need to shift folks’ mentality here is I
want to say away from the program. So shouldn’t we be managing this portfolio in the
context of all the services?
And I would just ask, in your experiences, is that something that you’ve thought about?
Is that something anyone’s done? Is that the way you see it? How do you represent back
to the client? Because I feel like we have this very disconnected message today where
we talk about the cost and performance of our services and then we almost turn around
and have a completely different conversation around our change portfolio. I’d like to
make sure that they’re all . . . and the client doesn’t want to consume a project to me;
they want to consume a service. So if I can communicate everything to them in the
context of what’s most relevant to them, I feel as though I have the opportunity to get
them better engaged in making the right decisions with us. But I’m very curious as to
everyone’s experience in that phase.
Todd: Yeah, I think that’s a great question. It’s kind of what is everybody’s experience or
responsibility for portfolio management as opposed to just service management? Any
comments there?
Jon: Can I add that specifically and ask Cason? Because Cason said at the beginning weekly
meetings as well as monthly and quarterly, that suggests an amazing level of interaction
and something that’s constant going on with the business. I’ve never managed quite to
do anything on a weekly basis.
Cason: The weekly basis, just to clarify again, is we have an executive reporting function where
on behalf of IT we report on the performance of IT to the board, to the offering
community and to the executive leadership. Now that’s different. We’re talking about
the expansive IT not just projects, but major milestones, major industry changes, major
opportunities, major issues. And so that would be inclusive of major project milestones,
but we’re not explicitly focused on just a project report if you understand what I mean.
Go ahead.
Carl: One thing I was going to say is in a way, cost is the easiest one. I know it sounds crazy,
but cost accountability is easier than service or satisfaction. I know what the costs are
and they just live within their money and then they say well, it sucks because you didn’t
fund me and then we just stare at each other. I think actually cost is easy. The question
is how do we change the outcomes and either not do the service that way or fund it out
to another service?
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Cason: That’s the thing that we were enabling at Visa with the structure we created. We’re not
there. I mean obviously it’s a journey. But the fact that we were the voice of the CIO to
his leadership reporting on the performance of IT, and the fact that we have that
accountability for the actual delivery to an end-customer, in other words Visa Europe as
well as some of our internal products that get sold to issuers and customers, because
we had that accountability for the service and we defined with the product
organizations those services and the service levels, cost kind of fit in right there with it.
So there was kind of a compression of decision making.
Your service level isn’t meeting your expectation, so therefore guess what? You happen
to also be running on one single processor with no redundancy and your costs are
aligned with that. In other words, your costs are low. Now if you want to boost your SLA
well then you’re going to have to make an investment.
Carl: Or we’re going to have to be more efficient on how we spend the money we’ve already
spent.
Cason: It’s managed holistically.
Carl: I had a slide in my presentation at the TBM where I had one slide where you had the
services then you had the quality of the service, you had the incidence and the metrics
then you had efficiency opportunities. And that to me answers the question of the
project office too, which is they should select projects which either make us more
efficient, make us more effective or resolve these risks and get our of this run and
change jail.
Cason: Absolutely agree.
Todd: Ultimately I think it goes back to the whole portfolio management concept which is
while the cost of an individual service is fairly easy to determine, at least at some level
and communicate those, it’s the tradeoffs that you have to make that becomes the big
challenge. And whether it’s tradeoffs at the service level, ultimately at the project or
project portfolio level, those tradeoffs have to be made. So I always kind of come back
to what’s the interaction there? Like Chuck, I don’t know if we have Chuck on the phone
from First American but Chuck owns both TBM and PPM at first American. Chuck, I don’t
suppose you’re out there.
Chuck Niethold: Yeah, I’m here Todd.
Todd: Great. Can you comment on that? How are you blending the two and driving the
portfolio-related decisions?
Chuck: You know, we’re struggling a little bit with the portfolio but we’re getting better with it.
But what we’re using on the TBM side, we’re blending stuff that we couldn’t do without
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it. So we’re taking actual time tracking and then looking at projected time tracking in the
future. So we’re doing that type of thing so you can see that we’ve overcommitted to
projects that are coming up in the next couple of months and that type of thing.
The other thing we’re doing is taking the data out of Microsoft Project Server, porting it
in then breaking it down in different ways. By division is one thing, because we might
have one division that’s doing very good and changing the business while another
division, all their decisions they’re making is just to do run projects. So we’re doing
things like that with the data that we just didn’t have; we couldn’t do before.
Todd: And Chuck, how do you or how will you expose that to the lines of business or other
stakeholders to sort of drive the decisions about what to change?
Chuck: You know, we’ve taken everything bottom and worked all the way up to the business.
So what we’re going to be able to do, and we’re working on it as we speak, is coming up
with a monthly report for the business. So one thing we’re working on is our KPIs now,
because what we’ve had with the business has been kind of interesting. Before we
started going in and doing any TBM, the questions were how are you spending my
money? What are you spending it on? So we’ve been able to go out and show the
business we’re spending money on our FAS system which is our main system. How much
we’re spending; how much of that is infrastructure? And we’ve been able to give them a
very good picture of what their applications cost. So they’re happy with that now.
Now the questions we’re getting are more along the lines of are you spending our
money well? Are you doing a good job with the money we’re giving to you? So now we
give you a lot of money. You show us where you spend it, which you couldn’t do before,
so we’re happy. But now are you doing a good job? So now what we want to do is go to
that benchmarking phase and KPI phase where we’re going to determine what services
do we produce for them, and then prove to the business we’re either doing a good job
with benchmarking or we’re not. And if we’re not doing a good job in a certain area,
then we can of course give them a list of things we’re going to do to improve. So we’re
kind of going to that next level, which is really pushing the data out to the business, and
then hopefully we can take some action on it with them and start developing that
partnership.
Todd: And when you say benchmarking, are you working towards external third party
benchmarking against your industry peers? Or more internal benchmarking? Or both?
Chuck: It’ll be both. It’ll depend on the service. We’d really like to use external because we
think that has a more meaningful . . . it’ll be more meaningful to the business. We can sit
with them and say this is how you can feel secure. We’re doing a good job. And so what
we want to do is what’s our measurement? How do we measure ourselves? And if it’s
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external we think that’s an easier conversation to have. Then go ahead and compare
ourselves against that external benchmark.
Carl: I think one thing to get a lot of adoption on TBM which is tied to your benchmarking
discussion is to find your customers within the business that are outside of IT who know
or are maybe deficient with regards to the outside world and partner up with them to
help get the metrics and everything and then push it back into IT. And that also adds a
lot more value to I think the TBM office. You’re kind of a customer advocate in a way.
Chuck: Right. We did just put in, in the last year or so, we do have the engagement managers.
So we’ll be working with the engagement managers to the business, and we think that’s
going to help because I’ve heard other folks are doing that too. I see a big benefit there.
So we’re going to have somebody working with them, and I can certainly go to them and
find out which ones are complaining the most about our services and then we can take
it and go back to them and actually have a fact-based conversation. I think that’s the big
thing is it takes that we don’t think you’re doing a good job. Now we’re going to prove
we’re not doing a good job or we’re not up to standards or we are performing at
standards and then it’s a different conversation after that.
Carl: That adds value to the technology business management office because we can all crank
out reports and show numbers, etc. But in the end if you’re making life better for a big
customer or solving a problem that’s out there that they’re not bringing up, or that they
might say to the CEO when the technology’s not around, that to me is a high value item.
Chuck: Because one thing we’ve noticed we had is we’ve said hey, the business cost of IT is
going up every year. Now what we’ll be able to go back and show them is some of it was
workplace services. You’ve added 2,000 employees. So what we can show them is our
cost per employee, to service that employee, has improved but yet yes our total cost
has gone up because you hired 2,000 extra people. So that stuff. And of course once you
talk to a business person in terms they can understand, that’s an easy discussion to
have. They go oh, I get that as opposed to in the past, my God, you guys need $10
million more dollars. Where did it all go?
Martin: Chuck, this is Martin. So a quick question on the engagement managers, are they inside
your TBM organization?
Chuck: No, I work for the strategy office so they’re inside a strategy office but they don’t report
up to me. So we’ve got a very small TBM office. It’s myself and one other person, Lance,
and we just hired a person to run the business of TBM to load all our monthly reports.
So it ties together.
Todd: Maybe for benchmarking, someday we need to look at how you’d size a TBM office
based on how big the organization is it’s trying to serve. That might be our own little
benchmark.
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Chuck: That would not be a bad one to have.
Todd: Because you’ve got three guys?
Chuck: Yeah, that’s what we’re going to have very shortly is a third person and that person will
be strictly to . . . we’ve designed a process to get the data in in a monthly basis, QA it
when it comes in, load it in the system, QA that and then from staging QA it again when
it gets into the system or into the final production. And then we’re going to do a process
at that point to see if any reports went out of spec so that before the CIO looks at
anything we can tell them that hey, this report that you’re going to notice shows this.
Here’s the event that happened that caused that to drop out of the norm.
Justin: I’ll take an action for that, because I think that’s something we can do pretty easily on at
least the TBM council scale as a start. But those would be really good metrics to have.
Todd: Yeah, I think along with that, you want to break out kind of . . . if I’m running a function
that’s not traditionally TBM, we’d want to break that out as well. We’ve got to figure
what is TBM? That’s great.
Justin: Yeah, I think it’s TBM and we have to know it by role because obviously some of you
don’t have certain roles within your TBM program office so we need to understand what
roles that deliver as well or they support. Somebody was trying to ask or add something
there though?
George Xiromamos: Yeah, hi, this is George with Safeway. I do love the notion of doing some kind of
sizing relative to the magnitude of the organization, I mean the sizing of the TBM office.
But I think it also needs to be tapered or at least influenced by maturity as well. Chuck
spoke earlier about his organization and I don’t think they want . . . he may have had the
need for three people day one, but I would imagine that probably played out much
more so as his charter better understood what he needed to deliver. Chuck, am I kind of
correct on that? I don’t want to put words in your mouth, but I’ve talked to you in the
past and it seems like the maturity thing really plays into how you structure your team.
Chuck: Two is more . . . I thought two was perfect to start with. One, definitely, you want
somebody who understands the tool and can be the tool jockey and then somebody
with some business experience. When I brought it to the table, Lance and I, my person,
we just made a great team. What we’re finding now is it’s starting to get adoption and
we’re getting so many requests for reports that to run the business of TBM, we need to
go ahead and move that somewhere else so we can stay focused on creating more
reports and more dashboards because we’re finding more and more uses for it and
we’re maturing the way we want which is great. And working as an offshore resource if
that helps to run the business.
George: Excellent.
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Justin: And Chuck, that goes to the heart of adoption right? So I’m curious why are you getting
more requests? What have you guys done right to sort of communicate that and drive
need or interest in more reporting?
Chuck: I think it’s a lot of what we’re trying to mature, and we want to do that. We want to
become better business partners from the CIO down and we want to get the KPIs in
place for each of the groups. That’s a whole new level. We’re going to have to get more
data in, and it’s just more and more things. So like I said, the questions from the
business at first were how are you spending our money? Where’s it going? And then the
questions we’re getting now, are you doing a good job of spending our money? How can
you prove that? So the questions of change. I think that shows a level of maturity that
we’ve reached now, that we’re going into that next phase.
Clark Robinson: This is Clark from Dell. Along those lines and along benchmarking, I’m wanting to know if
anybody out there is using the benchmarking module within Apptio and particularly if
you’ve done both, if you’ve used the benchmarking within Apptio and then also an
external benchmarking service if you can compare the pros and cons to both of those?
Because Dell is all about driving the cost out of things and I’m trying to figure out the
optimal way to use benchmarking in order to do that.
Todd: Not a lot of takers.
Clark Robinson: I guess not. Does anyone use the internal benchmarking module in Apptio? Nobody out
there?
Susan: We’re not using it in the purchase of the original contract that we did a few months ago,
but I have to say that I think it’s a fantastic idea. I mean just to be able to benchmark
yourself against the rest in the database? And know the number of customers and
clients on the tool are really expanding? I think it’ll be very powerful. I mean to me
that’s a big benefit of being in the cloud. I have to say . . . I mean I think we have plenty
to keep us busy for the first year of implementation and the rollout of transparency
through automated means. But I certainly will be pushing probably at some point to
have that benchmarking.
Clark Robinson: It sounds like maybe I’ll be running point on this so I’ll let you guys know what our
experiences are. Last year we did benchmarking with a corporate executive board and it
was very powerful. They put you on a grid between cost effectiveness and performance,
so you figure out where you are relative to the industry in four quartiles on that grid for
each of your service towers. And it was a really good report they did for us. But I’m
trying to integrate that with our Apptio implementation and so we’re going to be
building out the benchmarking piece. We haven’t had the luxury of having people ask us
how you’re spending the money. I mean they jump straight to are you spending our
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money well? That’s kind of our culture here. So I’m trying to figure out the best way to
prove that we are.
George: It sounds like you have a great opportunity though to benchmark the outcome of the
Apptio product against what you got from the corporate executive board last year.
You’ve got some data, you’ve got some results, so potentially you have a good reference
point there to setup your Apptio IT benchmark module and use last year’s results from
the corporate executive board, the data as a benchmark itself.
Clark Robinson: Yeah, I’m looking forward to doing that. There’s not a one-to-one correspondence
between the corporate executive board and Apptio in terms of what is being measured,
but on those items that are being measured it’ll be interesting to see the comparison,
yeah.
Justin: You know guys, this conversation regarding benchmarking is really resonating. As we
talk to various groups within the council, this notion of being able to benchmark has
come up again and again. We’re actually right now thinking about how we can better
serve the members through the benchmarking information that we’re collecting in the
council. One of our thoughts is particularly around the vertical space, there’s an
opportunity to come in and take the data that we’re collecting from the index, perhaps
merge it with other data, and provide some interesting insights to the members with
respect to the way that various companies are tracking. So it’s kind of a seed of an idea
now if you will, but I would love to follow up with a few of you guys individually as we
form this service for the council and get your input and feedback because I think there’s
some real value here in kind of taking this to the next level.
Todd: Yeah, I’ll just add one comment in regards to benchmarking. The challenge is always . . .
well, it’s two-fold. One is that you’ve got to find a comparable peer group because it’s
very easy to compare apples to oranges and the first approach to minimizing that or
providing better comparability is to define the peer group very carefully. Even within
industry, it can be kind of dangerous as I’m sure many of you have experienced.
The other thing is a lot of the benchmarking data that’s available is survey-based as
opposed to generated by a real activity-based costing approach, and we have that
challenge as well right? We’ve got 140 company’s customers, and that right there, it’s
getting to be a decent pool of comparable metrics but it’s something that we’re
investing in because we know to I think give value to you guys, it’s got to be based on
the modeling and having a true cost as opposed to one that is based on survey which is
usually a pretty gross measure of cost. And because of that, the comparability is
questionable let’s say.
But I’m probably not saying anything you guys haven’t already experienced. The thing
we see more of honestly is we see more internal benchmarking where you’re looking at
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rates, unit rates of delivering service or a product or a technology, and you’re comparing
either across geographies, across data centers and providers, across vendors in a lot of
cases and even over time of course to see how those are trending and then finally we
see some by consumer, because the consumer choices that are made can drive
variances in the unit cost as well. So we see a lot of that that goes on, which is really just
slicing it in different ways but looking at it on a unit cost basis.
I think that’s pretty important obviously, but the point I think was made earlier, maybe
it was you Chuck that said demand driving up cost? You have to keep it in a unit-cost
perspective because demand will obviously affect the total cost but you should be able
to take care of volumes and scale to hopefully drive efficiencies as well. So we are at the
90 minute mark so I do want to respect everybody’s time; now 91 minutes. So I want to
thank everyone for participating in this. It was good. Of course we didn’t cover near all
the questions which I knew we wouldn’t, but we did actually cover a lot of the ideas in
the four sections so I think it was really good.